House committee approves ‘soft drinks’ tax

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House committee approves ‘soft drinks’ tax
If the law is passed, an excise tax of P10 will be imposed for every liter of sugar-sweetened beverage

MANILA, Philippines – The House of Representatives committee on ways and means approved on Tuesday, November 10, a bill seeking to impose excise tax on sugar-sweetened beverages like soda and energy drinks.

Authored by Nueva Ecija Representative Estrellita Suansing, House Bill 3365 is now up for 2nd reading before the plenary.

Should it be enacted, it would charge P10 ($0.22) for every liter of sugary drinks. A mandatory increase of 4% every year shall also be imposed effective on January 1, 2017. 

The bill defines sugar-sweetened drink as “a non-alcoholic beverage that contains caloric sweeteners, added sugar, or artificial/non-caloric sweetener.”

“It may be in liquid or solid mixture, syrup, or concentrates that are added to water or other liquids to make a drink,” the law noted.

This includes carbonated drinks (more commonly called soft drinks), fruit drinks, ades, sports and energy drinks, sweetened tea, coffee, and all ready-to-drink non-alcoholic beverages in powder form.

All-natural fruit and vegetable juices, yogurt beverages, meal replacement drinks, and all milk products are excluded.

Revenue-generating measure

Fifty percent of revenue collected will go to the national treasury. The other half will be distributed to the following agencies to fund their health-promotion projects:

  • Department of the Interior and Local Government (23%)
  • Department of Education (10%)
  • Department of Health (10%)
  • Bureau of Internal Revenue (2%)
  • Food and Nutrition Research Institute (2%)
  • Food and Drug Administration (3%)

Beverage manufacturers and importers are required to submit a sworn statement of the volume of sales for each brand sold for 3 months 30 days from the effectivity of the law.

After the first wave of implementation, they are required to comply within the first 5 days of every 3rd month. 

Failure to declare the volume of sales would result in the cancellation of the production or distribution party’s permit to operate business related to sugary beverages.

On top of this, violators will be fined with the amount of deficiency taxes, along with the corresponding surcharge and interests. They would also be criminally liable under the National Internal Revenue Code of 1997.

Soft drinks tax a ‘burden’

Although the health department supports the policy, beverage makers are against it, saying it would affect consumers and the economy. (READ: Soft drink tax a ‘good health measure’ – IMF official)

The Beverage Industry Association of the Philippines (BIAP) earlier said that the excise tax would pose a drop in their sales that will result in forced labor retrenchment. This will also increase the cost of these beverages, which will be a burden to Filipino consumers. (READ: Beverage makers: Soft drink tax to ‘burden’ consumers, economy

In a statement released Tuesday, BIAP called the House bill “anti-poor” and “anti-business.”

While BIAP expressed support for calls to reform the income tax system in the country, the group said to impose a tax on soft drinks and other sweetened beverages, like powdered juice drinks, 3-in-1 coffee, and ready-to-drink juice is “taking away…power from the Filipino consumer. (READ: Beverage makers support income tax reform) –

US$1 = P47.27

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